RES03 - Reserve Fund Reports- Getting One DonE
Who should do the Reserve Fund report?
Provincial Acts often specify who is able to prepare Reserve Fund Reports in their respective Province. For example, in Ontario who may prepare a Reserve Fund Report is clearly spelled out (link). Effectively, engineers, architects, and others who have received formal certification. In BC and Alberta, it’s far less defined, with the legislation only specifying a vague requirement of a “qualified person” with the possibility of the Board “doing it themselves” they deem themselves to be qualified. Depending on who you ask – this can be a good thing or a bad thing. There are some legitimately knowledgeable Board Members in non complex condos (think small townhouses where individual unit have self contained HVAC and plumbing) that would be able to compile their own Reserve Fund Report. However, as with much of society, you have to legislate to the lowest common denominator. Which means trying to ensure the clueless members of a 50 unit apartment style condo circa 1965 don’t try and “do it themselves” on the cheap and totally incorrectly. Sadly I have seen this done, and given that nightmare I would be in favor of the Ontario approach of mandating certified professionals. If you’re in a province like AB or BC that doesn’t mandate who can do reserve fund reports – I’d recommend following the Ontario criteria when you’re looking for someone to prepare your report. How often is it done? Provincial acts mandate the frequency that Reserve Fund Reports must be “refreshed”. See our “Provincial Differences” table for a summary by Province. I would also recommend that any major “substitutions” in the Inventory of Common Property made by the Board (ie swapping one expense for a lessor or more expensive expense) or timing of expenditures (ie moving expenses from 2024 to 2015) trigger a “refresh” of the Funding Schedule. Moving those cash flow amounts around can unknowingly trigger a underfunding situation. Refreshing the tables is a fairly simplistic change and one would hope your Report Prepared would have a minimal charge for this. How Much does a Reserve Fund Report Cost? That depends on several factors: - What province and area of the country are you in? The laws of supply and demand will come into play here. A Reserve Fund Report is likely to cost more in Calgary than it will in Southern Ontario. - How complex is your building? Put simply a report will be more expensive for a 50 story apartment building with a lots of amenities and a retail component vs a simple 3 unit townhouse complex with self contained HVAC sytems. The more items on the Inventory of Common Property, the more expensive a Reserve Fund Report will be. - Who’s doing the report? A report preparer with proper training and certifications (and liability insurance!) will be more expensive that a person without all that. With all of these factors in mind, I’m going to give you an incredibly vague answer of how much an initial Reserve Fund Report will cost. Be prepared for an amount between $1,000 into the tens of thousands of dollars. For an extremely complex multi building complex with retail / commercial / residential components it could be even more. Note that this is for the initial report – setting up a report and inventorying all the items of common property and assessing their condition is a lot of work and as such will be a lot more expensive. Subsequent updates to the report, especially if the same person is used, should be less expensive, especially if it is just to “refresh” funding schedules and not reassess the condition of common property. One tip for Board Members – given the cost involved with Reserve Fund Report major refreshes – I’ve always liked to include these expenditures as an item of common property and save for them via reserve fund contributions vs the operating budget. ~CondoSensei |
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